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News Now

September 12, 2014

100M memberships celebrations brings in the major leagues

CU System
WASHINGTON (9/12/14)--No strikeouts here--just solid home runs by credit unions as they celebrate the movement's 100 million memberships milestone at big league baseball parks.
 
Sunday has been designated as Credit Union Day at U.S. Cellular Field when the Chicago White Sox take on the Minnesota Twins at its home ball park. Look for Illinois Credit Union League President/CEO Sean Hession to take the mic for the singing of the "National Anthem." Hession is a former principal first tenor and tenor soloist for the National Men's Chorus in Washington, D.C.

The game also will honor World War II veteran Dick Lockhart as "Hero of the Game." Lockhart has been a lobbyist for the league for more than 50 years.
 
The hits keep coming Tuesday when the Baltimore Orioles host the Toronto Blue Jays at Camden Yards for "100 Million Membership Day." Ticketholders get a 100 million memberships T-shirt to wear at the game, too.
 
For the Washington Nationals home game vs. the Florida Marlins Sept. 26, the Credit Union National Association and other credit union sponsors will have a giveaway for game-goers, a booth inside the stadium to educate spectators about credit unions and the credit union difference, and between-innings announcements that focus on the milestone.
 
Nationwide, credit union leagues have teamed up with local minor league teams to celebrate as well. Utah Credit Union Association President/CEO Scott Simpson tossed the first pitch at the Aug. 9 Salt Lake Bees vs. the El Paso (Texas) Chihuahuas game (News Now Aug. 14)
 
In early August, CUNA sponsored another entertaining event---a food-truck festival called Truckeroo where CUNA staff and credit union volunteers distributed "Credit unions are a smarter choice" T-shirts and slap koozies to keep beverages cold (News Now Aug. 11).
 
All of the activities have been celebrating the 100 millionth membership which occurred in June, according to CUNA credit union data. ReadMore

Millennials eschew credit cards, put future credit at risk

CU System
NEW YORK (9/12/14)--Millennials are carrying around much less plastic than their older counterparts, a study from Bankrate.com has found, as 63% of people ages 18 to 29 don't possess a single credit card ( USA TODAY Sept. 11).

While this choice could steer many away from the pitfalls of overwhelming debt, the decision to swear off credit cards could inevitably hurt this younger generation, personal finance expert Jean Chatzky told USA TODAY .

Credit scores play critical roles in determining whether a consumer can secure a car loan, how much a consumer will pay for car insurance, or even how he or she will look to prospective employers.

"They are widely considered a mark of how responsible you are as a member of society," said Chatzky. "As far as for car insurance goes, your credit history is a better indicator of risk than even your driving record."

On the other side of the coin, as consumers get older, credit card use climbs. The study found that only 35% of adults 30-and-over don't possess a credit card.

The reason for the disparity, perhaps, is that millennials simply don't want credit cards.

"I don't really feel like there's a need for one in the way I live my life," Melissa Pileiro, 24, from Vineland, N.J., told Bankrate.com . "The idea with a credit card is you're essentially putting money down that you don't have."

Further, a Gallup poll from earlier this year found that Americans' reliance on credit cards in general has declined over the past few years since the economic downturn.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 also made it more difficult for those under 21 to gain access to a credit card.

Finally, it could be that because many millennials grew up during the recession, they saw the problems credit cards could create, according to David Pommerehn, senior counsel with the Consumer Bankers Association ( Bankrate.com ).

"There was great concern about jobs and debts and paying off bills," he said.

But no matter the reason for shying away from credit cards, paying with plastic remains one of the top ways to build a solid credit score.

Millennials "have to understand that it costs you money not to use credit, just as it costs you money to use credit," Mike Sullivan, director of education at nonprofit credit and debit counseling agency Take Charge America, told Bankrate.com .

No or low credit scores won't help consumers qualify for low loan rates, he said. ReadMore

NCUA, AARP team up for fin. ed. initiatives, outreach

Washington
ALEXANDRIA, Va. (9/12/14)--The National Credit Union Administration has announced a new alliance in the effort to increase the financial literacy of the American public.

The agency said Thursday that it will team up with the AARP to work on a series of initiatives to promote financial education and outreach. The intention is to help consumers achieve financial security and increase access to responsible and affordable financial services.

According to the NCUA, joint activities will include sharing financial education tools and resources, co-hosting events in communities and online and participating in working groups with one another and other organizations.

The two organizations have signed a memorandum of understanding outlining a two-year plan for initiatives that will cover consumer-friendly financial services, anti-fraud efforts, entrepreneurship and financial literacy, among others.

"Promoting financial literacy is an important goal for NCUA and one of the core missions of federally insured credit unions," NCUA Chair Debbie Matz said. "There are many areas where AARP and NCUA can work together to strengthen the financial health of Americans of all ages."

According to the NCUA, activities will include, but are not limited to, sharing of financial education tools and resources, co-hosting events in communities and online and participating in working groups with one another and with other organizations.

The NCUA participated in the AARP's Ideas@50+ event in San Diego last week, providing informational material to hundreds in attendance about credit union services, share insurance coverage, elder financial abuse and the agency's financial literacy resources.

The agency currently offers financial education materials geared toward all populations at its MyCreditUnion.gov website.

Use the resource link below to access previous News Now coverage of the NCUA's financial literacy programs. ReadMore

Technical amendments, stabilization fund report on NCUA meeting agenda

Washington
ALEXANDRIA, Va. (9/12/14)--The National Credit Union Administration has released the agenda for its monthly board meeting, which will be held Sept. 18. The meeting will be the first with new board member J. Mark McWatters, who took office last month.

The agenda includes discussion of a final rule containing technical amendments to parts 701 (organization and operations of federal credit unions), 706 (unfair or deceptive acts or practices) and 790 (description of NCUA; requests for agency action) of the NCUA's rules and regulations.

The technical amendments are likely to involve:
  • An update reflecting the fact that the Dodd-Frank Act stripped the NCUA of rule-writing authority for unfair or deceptive acts and practices;
     
  • An update reflecting changed central office and regional structure; and
     
  • Renaming payday/small amount, small dollar loans "payday alternative loans."
The agenda will also include a request to expand community charter from First Service FCU, based in Groveport, Ohio, with $136 million in assets, and the quarterly report on the Corporate Stabilization Fund.

The meeting will take place at the NCUA's Alexandria headquarters, starting at 10 a.m. (ET).

A video recording of the meeting will be made available in the coming weeks, once the recording is made accessible to the hearing and visually impaired. ReadMore

UBIT Steering Committee receives prestigious Pierre Jay Award

Washington
WASHINGTON (9/12/14)--The UBIT Steering Committee, comprised of the Credit Union National Association, CUNA Mutual Group, the American Association of Credit Union Leagues and the National Association of State Credit Union Supervisors (NASCUS), was recognized Thursday for its long and diligent work that successfully persuaded the Internal Revenue Service to issue examiner guidance on unrelated business income tax (UBIT).
 
After almost 20 years of advocacy by the UBIT committee, credit unions in April received a much-sought-after interpretation by the IRS that cleared nearly all credit union products from being subject to UBIT.
 
The prestigious Pierre Jay Award was awarded by NASCUS at its 2014 State System Summit in Nashville, Tenn.  
 
NASCUS noted that a turning point in the steering committee's work came in 2009, when Community First CU, Appleton, Wis., prevailed in a jury trial against the IRS on UBIT issues, and when a federal court in Colorado ruled in favor of Bellco CU, Greenwood Village, Colo., in its UBIT challenge. The steering committee had worked closely with both credit unions in support of the litigation.
 
Receiving the award on behalf of CUNA were Kathy Thompson, CUNA's senior vice president of compliance and legislative analysis; Larry Blanchard, CUNA Mutual Group legislative consultant, on behalf of CUNA Mutual Group; Fred Robinson, Tennessee Credit Union League president/CEO, on behalf of AACUL; and Mary Martha Fortney, NASCUS president/CEO, on behalf of NASCUS.
 
NASCUS first presented the Pierre Jay Award in 1997. It's named after Massachusetts' first commissioner of banks, who is considered instrumental in shaping credit union history. ReadMore

Cordray addresses new mortgage forms, eClosing pilot program

Washington
WASHINGTON (9/12/14)--With new mortgage form requirements going into effect in less than a year, and technology offering solutions to make loan paperwork simpler for consumers and lenders, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray took some time to address those issues this week.

"The Consumer Financial Protection Bureau has enjoyed a great relationship with credit unions. We see eye-to-eye on many things, most of all that we both aim to serve Americans who are not only your members but also the consumers we work so hard to protect," Cordray said, speaking at the National Association of Federal Credit Unions Congressional Caucus.

The bureau's new mortgage disclosure forms will take effect Aug. 1, 2015, and Cordray provided some details of the program.

The new rule is intended to ensure that homebuyers no longer receive overlapping forms from lenders and the government. Under the new rules, consumers will get a single form after applying for the loan, known as the loan estimate, and one form before finalizing the loan, known as the loan disclosure.

"These new forms will enable consumers more readily to spot crucial information that demands their focus, such as the interest rate, monthly payments and total closing costs, as well as any special risk factors that could lead to payment increases over time," Cordray said. "The underlying premise for both the loan estimate and the closing disclosure is that consumers will be better able to understand the mortgages they are buying and the costs they are paying."

Cordray added that, though the forms are not required until August 2015, lenders should already be working on the rule and preparing for the change. The bureau is working on a readiness guide for the regulations to be released in the coming months.

The CFPB has been hosting a series of webinars leading up to the implementation date, and the next one is scheduled for Oct. 1.

Cordray also provided a summary on the bureau's eClosing pilot program, which will include two credit unions, BECU, Tukwila, Wash., with $12.6 billion in assets, and Mountain America CU, West Jordan, Utah, with $3.8 billion in assets ( News Now Aug. 22 and Sept. 4).

"This pilot will explore how the increased use of technology during the mortgage closing process could affect consumer understanding and engagement and save time and money for consumers, lenders, and other market participants," he said.

Use the resource links below for more information. ReadMore

See who's 1st to earn CUNA's new biz development designation

CU System
MADISON, Wis. (9/12/14)--So emerges the first-ever group of credit union professionals to receive the newly offered Credit Union Business Development Professional (CUBDP) designation--developed by the Credit Union National Association--CUNA announced this week.

The group of 40 individuals earned their new credentials by demonstrating exemplary knowledge and expertise during CUNA FUSE: Branch Operations and Business Development School last month.

"CUNA FUSE lit the fuse for the group of business development professionals eager to engage, share and promote one another in a dynamic setting," said Natalie Bradley, Ventura (Calif.) County CU, with $677 million in assets. "Having been in this industry for almost a decade, I walked away with fresh ideas, new resources, a supportive business development posse and a strategic focus for my credit union."

CUNA FUSE is an annual event that gives attendees the opportunity to discuss and deliver innovative ideas alongside credit union branch managers and business development professionals to fuel growth and increase efficiency at their individual credit unions.  

The CUBDP designation, created in collaboration with the CUNA Marketing and Business Development Council, is available to anyone who attends CUNA FUSE's entire business development track and successfully completes the exam.

The designation demonstrates that the professional possesses the initiative and pertinent expertise needed to be a credit union business developer.

"Early on it was clear that we'd done the right thing in creating this designation," said Kathy Smith, CUNA instructional design manager of learning events. "Every one of the new CUBDPs has shown that they have what it takes to step up and be an authority on business development and a representative of their credit union."

Next year, CUNA FUSE will take place Aug. 17-20 in Seattle. For more information on CUBDP or to register for CUNA FUSE 2015, use the link. ReadMore

Other Resources

Consumers have bleak view of U.S. economy, finances, reports find

CU System
LOS ANGELES and PHILADELPHIA (9/12/14)--Two recent studies--one by GOBankingRates.com and one from the Pew Research Center--capture the sentiment that Americans continue to be stressed about the economy and fearful for the financial futures.
 
A third of respondents to a recent GOBankingRates.com poll said they worry about their finances "all the time."
 
When asked to select their top three fears from a list of 10, four financial fears--always living paycheck to paycheck, falling into serious debt, becoming homeless and losing a job--made up 66% of the responses.
 
"When money problems comes up, we are forced to consider every aspect of our lives falling apart instead of just one or two. It is all subconscious but it is huge," said Leisa Peterson, certified financial planner and founder of WealthClinic.
 
Of the financial fears, being unemployed led with 27%--the most common fear among 18- to 24-year-olds at 30%.  The next highest fear of never getting out of debt--26%--was selected most often by those older than 45.
 
Although the employment market is improving slightly, overall consumer sentiment about the economy is bleak, according to a new national survey by the Pew Research Center.  
 
Incomes that are lagging behind the cost of living concern 56% of the respondents, which is almost in line with those who said their incomes were falling behind--57%--in October 2008 during the financial crisis.
 
Among those families with less than $30,000 per year, 66% have confronted as least one serious financial problem such as becoming unemployed or having hours cut, being unable to pay for health care, struggling to pay rent or mortgage, or having been contacted by a collection agency. Overall, 45% say they have experienced one or more such serious financial hardships over the last year.
 
Cost of living concerns run along the lines of income differences. Of those with family incomes of $75,000 or more, most say they are at least keeping pace with the cost of living. Among those with incomes of $100,000 or more, 48% are staying even.
 
However, in the two lowest income categories, respondents say they are not keeping up. More than half of those with family incomes between $30,000 and $75,000 say they are falling behind, and just under 40% are staying even. For those with incomes under $30,000, 70% say they are falling behind. ReadMore

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